The weak leadership of Government has become very apparent this week, with backbenchers resigning the whip in protest over the budget. Many of the Government TDs do not have the ability to handle the public complaints about the forthcoming cuts.

A national meeting of Fianna Fail councillors last Sunday week disclosed worry over the forthcoming local elections and what the new situation means.

Already there has been a climb down from the full withdrawal of the controversial measure to withdraw medical cards from the over 70s. It was to be means tested in the future, now there has been a further adjustment this week with 95 per cent of people qualifying.

The concern over the pay deal has led to some change in the one per cent levy for the lower paid people with an announcement later in week after a meeting with the unions.

The Finance Minister, Brain Lenihan and Tanaiste, Mary Coughlan seem to approach matters on an ad hoc basis with worries over certain matters leading to changes.

This is a rather hap hazard way of sorting out the public finances. When there was banking and liquidity crisis there was firmer government. The banking measures did lead to decisive Government, but the next stage of the financial crisis in sorting out the economic problems of the public finances have not been as authoritative.

If the pensioner medical card issue was fraught with so many problems why go ahead with it.

Former Taoiseach, Bertie Ahern’s antenna would have shot up to check out this measure and see the public reaction.

He gave it away in 2002 through then Finance Minister Charlie McCreevy and pulled off another election win, at a time when the economy was also slowing down but not anything like it is now.

The Lenihan Budget last week also brought in an income levy after securing a tough pay deal. This is also a measure that one would expect to have provoked anger, but if you are in Government in a slowing and difficulty economy, you have to take tough decisions.

Then again people should know that living standards have risen in the past decade so a reduction in the current climate is not a surprise.

The government deficit is way above what it should be. The big problem is the large numbers that were brought into the public service in the last 5 years, the lack of full use of technology and reductions in numbers.

More efficiencies are needed in many areas and changes in how work is done.

If the Government were to look back and see what value they got for the benchmarking would they have given it to the staff now.

No doubt there has been some productivity returns in some areas, but the 10 per cent extra pay given along with the growth in numbers employed lie behind the drastic problem in government finances.

With all the extra revenue coming from property related taxes, such as Stamp duty the Government could not wait to give it away again. The public service unions were not slow to make demands and a buy out of the demand seemed a safe politican way out of it.

Similar circumstances occured back in 1980/81, when Charlie Haughey was Taoiseach and the country drifted along.

Eventually the public finances were in trouble, an election put the first Fine Gael led FG /Labour coalition.

John Bruton brought in his tax on children’s shoes and vat on clothes.

Jim Kemmy and others refused to play ball and voted against it, thus bringing down the Government.

In the past Bertie Ahern briefed Independents, maybe the same could have been done with Finian Mc Grath and Jackie Healy Rae, McGrath ‘s vote is now definitely gone.

Healy Rae will carry on a little longer, but the seeds of doubt are there.

Confidence in the Government is going, they seem to not have the political cuteness of Ahern and ability of managing people such as the Coalition partners and Independents.

More rebellion can be predicted. A change may be needed at the top to sort matters out, having a Finance Minister, who says he is trained as a barrister and not as an economist may show some humility but is he the man for the hour.

Over the next month we may see calls for Charlie McCreevy to return from Brussels just as Mandelson did to the UK Government.

The lack of experience last week displayed by the Government needs to be remedied to restore stability.

Minister for Finance Brian Lenihan acted well in the banking crisis, but the flip flop changes in the latest few days will only see more pressure come on when difficult decisions are needed.

Some tough Government will be needed in the next few years. John Bruton failed to get a budget passed, Minister Lenihan will get over the line on this one, but should he be moved elsewhere off to Foreign Affairs maybe.

It looks bad now for the credibility of Government when harsh measures are needed. McSharry managed it in 1987, Dukes taxed the country into high unemployment back in the mid eighties, we do not want the same mistakes again.

Other cuts and levies are likely to make up for public financial problems elsewhere.

It is hard to see if the doctors will reduce their charges to pensioners in the national interest but it worth a try, may be he should have tackled the doctors first on their charges and saved money that way. They are all doing well and would have been able to take some reductions.

Saving on drugs and prescriptions is another area, where generic drugs may be cheaper.

The way it looks this Government will not go the distance of its full term.

Fine Gael and Labour will be waiting in the wings. Richard Bruton would be a capable Minister for Finance, but the decisions will be tough no matter who is in power in the next two to three years as we wait for a full turnaround in the world economy.

An upturn in the USA next year would help.

Capital spend

We understand that the Waterford to Dublin motorway and bridge are safe following the Budget. It is essential that the capital programme is maintained.

We are so far behind in infrastructure it is imperative that it is maintained.

Additional roads investment will be hard to get. The closure of the Tramore Waterford road will be a hassle but will be an advantage in the long run if the flooding problem is cured.

No news yet on Waterford Airport and its extension. Rail investment should also be maintained.


The hype before the budget suggested that a break would be put on decentralisation for Dungarvan and Waterford. In other parts of the country sites had been purchased awaiting development.

Similarly in Tramore a site was bought for the new Secondary School, but there is no imminent go ahead of this project. Bank support for public private partnerships may not be easy to achieve as before.